Harvard Ditches Investments in Israel: Politics or Business?

Update 2:13 p.m.: Harvard has issued a statement saying that the university "has not divested from Israel"--rather, the holdings have been transferred out of the emerging markets portfolio due to their "successful growth."

Harvard University has ditched
its investments in Israeli companies, raising red flags among Israel
supporters. Was this political? With no comment from the university,
the blogosphere is alight with speculation. Some assume there is
political motivation, but others point out that the Israeli investments
had done poorly in the second quarter, anyway--selling them off could
have simply been a good business move.

The Hypocrisy! "It
seems unlikely that Harvard's portfolio managers would simultaneously
decide that it was time to sell all shares in five different companies,
with nothing in common other than the fact that they are located in
Israel," muses John Hinderaker
at Power Line. Simply put, he thinks it's political. Laid side-by-side
with the money Harvard is "happy" to get from "real oppressors" like
China and Saudi Arabia, it looks bad, Hinderaker thinks.

The chances of this move being at all politically motivated are remote: the most recent concerted attempt that Joe Weisenthal
can find to get Harvard to divest from Israel dates all the way back to
2002. And I'm sure that if you looked at all endowment 13-Fs on a
quarterly basis, you'd find that every quarter a pretty large number of
endowments will turn out to have sold out of some small market or
other. It’s just that by sheer coincidence, this time it's the two big
hot-button names, Harvard and Israel, and hence there's lots of
headlines.

Agreed: These Investments Were 'Trending Down' Anyway UCLA law professor Stephen Bainbridge
takes a look at the individual Israel-based stocks, which hadn't been
doing so well, it turns out: "the more I learn about this matter, the
more it looks like a pure investment decision," he writes.

From Israel: DittoCarl in Jerusalem,
blogger of Israel Matzav, says he's inclined to go with the theory that
"the Israeli stocks in Harvard's portfolio had performed poorly of
late," and that this is the reason behind the switch. He finds this
"more plausible" than the theory that Israel, now admitted to the OECD
no longer counts as an "emerging market" and was bounced from the
emerging markets portfolio on these grounds.